Solutions will also require the provision of quality education to rural populations, including on the use of digital technologies,so that the agricultural and rural workforce can maximally benefit from new technologies and off-farm employment opportunities. To mitigate problems that arise during the farm labor transition and help prevent a reversal to agricultural policy distortions, adequate social protection systems that mitigate calls for agricultural protectionism must be developed. The decoupling of social protection from employment holds promise in that regard , with the massive expansion of social protection provisions across the globe in response to COVID-19, especially through cash transfers, providing useful experiences and platforms to build upon. The remainder of this paper discusses the impact and evolution of these different forces and reflects on a policy agenda that can leverage the future global food system to generate decent employment, accelerate poverty reduction, and attain shared prosperity. Work in agriculture tends to be seasonal and dispersed across space, with labor productivity often low and unpredictable. High fertility among rural and agricultural populations, partly in response to low and variable agricultural earnings, often contributes to low labor productivity. As countries become more affluent, their demand for nonfood goods and services increases, and their work forces shift out of agriculture into more stable, high-paying, jobs in industry and services.The development of food manufacturing and services is particularly important in the process of narrowing cross-sectoral income differences. These nodes of the AFS tend to be more labor-intensive and less high tech than other industries and services, more likely to employ women and unskilled workers ,drainage planter pot and less spatially concentrated .This pattern of structural transformation is evident historically in high-income countries and is currently unfolding in low-income countries .
Against this broad and sweeping background of structural transformation, what role will the AFS play as a source of employment and shared prosperity in the future? First, on-farm work will continue to be a major source of employment in poor countries. In low-income countries, as in much of Sub-Saharan Africa, a decrease in the share of the workforce employed in agriculture is still accompanied by an increase in agricultural employment in absolute terms. Given high population growth, the agricultural workforce is projected to continue swelling in the foreseeable future before it starts to decline . Therefore, in low-income countries, where most of the global agricultural workforce is still concentrated, the transition out of agriculture in the short run does not necessarily imply a smaller agricultural workforce overall. In these settings, the primary challenge is to improve the quality of farmers’ jobs, while also facilitating the transition out of agriculture. In many middle income countries, on the other hand, as well as historically in high income ones, the absolute number of agricultural workers has decreased over time,farm populations have “grayed,”and farm labor shortages in specific commodities at specific points in time have become a feature of the agricultural landscape. Second, agricultural labor productivity will continue to rise.The existence of a persistent and large productivity gap between non-agricultural and agricultural activities is received wisdom in development economics. It is often seen as proof that agriculture is intrinsically less productive and as suggestive that the policy solution for agricultural labor in the developing world lies in removing barriers that prevent people from exiting agriculture . Recent research, however, suggests that agricultural labor productivity is understated .
Using micro household data instead of national macro accounts, controlling for skill differences, and expressing productivity in terms of value per hour of labor , labor productivity in agriculture is not lower than in other sectors . This finding suggests that agriculture is not intrinsically less productive but, rather, underemployment in the sector is high, at least in the earlier stages of development. Underemployment is likely linked to the seasonal nature of agricultural production and high fertility rates . If the productivity gap is much smaller than generally assumed, a disproportionate focus on policies to remove barriers to sectoral or spatial migration, however well-intentioned, may be misplaced. In fact, if agricultural labor is only in surplus during the agricultural slack season , such policies may prove ineffective, or they may even exacerbate agricultural labor shortages during planting and harvesting . Improving agricultural productivity would enable a productive move out of agriculture, leaving a more productive agricultural labor force behind. This could be accomplished through the development of complementary activities during the slack season, such as double cropping through irrigation and mixed farming systems .These types of developments would maximize poverty reduction , in contrast to a scenario in which people leave agriculture due to distress following under investment. The road out of agriculture runs importantly through a path that increases labor productivity in agriculture. This agricultural job paradox remains underappreciated. It will eventually leave far fewer people in farming, but they will have better employment conditions, and there will be greater quantities of relatively cheap food available for those in the rest of the economy. This process is still not underway in earnest in many African low-income countries . Third, the successful exit of labor out of agriculture is intimately tied to a successful agricultural transformation . Food expenditure shares decline as incomes increase.
Food consumption patterns also change from primary staples to more protein- and micro-nutrient-rich diets .Eventually, societies tend to demand more processed and prepared foods; they may even develop food consumption patterns that involve eating as an “experience.” Societies become more dependent upon the downstream AFS as a result. This, in turn, opens up new employment opportunities off the farm in food processing, marketing, logistics, food retail, and food services. A fair number of farm workers who leave the farm remain within the broader food supply chain. In many low-income countries, off-farm work in the AFS already makes up about 25 to 33 percent of overall off-farm work . Off-farm AFS work is still relatively small as a share of total employment ; however, it rises to 25 percent when expressed in full-time equivalent employment as opposed to the number of people employed .The importance of off-farm employment in the overall AFS rises with income, from 9 percent of total AFS employment in Eastern and Southern Africa to 52 percent in Brazil and 80 percent in the United States . The share of off-farm AFS employment in total employment first rises and then falls . Asia’s experience shows that more successful countries develop their off-farm AFS as they pass through the structural transformation, and this leads to a more rapid reduction in poverty . In China, India, and Vietnam, the “supermarket revolution” has been more intense and rapid than in other developing regions, driven in part by private vertical coordination that has generated economic growth through the introduction of contracts, the creation of new credit and input markets, and tighter linkages between farmers and buyers . As agri-food systems develop, processing, logistics, and wholesale operations become more consolidated, incorporating advanced technologies in order to reduce costs and ensure timely availability of quality goods . In China and Vietnam, there has been an emerging shift from small- to large-scale processing, logistics, and storage,plant pot with drainage driven by large foreign investments in fixed plants . India and the Philippines enacted laws that prevented foreign direct investment from entering the retail food sector, leading to slower growth . Domestically funded market hubs have emerged in India, and they are expanding rapidly, effectively bringing modern markets to farmers .14 Non-farm AFS jobs are often also more easily accessible for women and poor workers leaving the farm, given their proximity and low entry requirements in terms of capital and skills.A large part of employment opportunities within the AFS is happening in secondary cities and towns , increasing their potential for poverty reduction, as most of the poor live in the rural hinterlands of these intermediate centers . Several recent case studies support the beneficial effects of the AFS and related development of agri-food value chains on labor force participation, income, working conditions , and, in some cases, smallholder participation in modern markets. Examples from the Future of Work in Agriculture conference include Sauer et al. for domestic food systems in Tanzania, Edwards for post farm oil-processing farms in Indonesia,and Maertens and Fabry for horticulture exports from Senegal to European markets.
The latter shows how vertical integration of production to meet the quality and standards requirements for European markets increased not only labor force participation, employment, and income in the source areas but also educational attainment and a reduction in fertility rates—evidence that the development of agri-export supply chains contributes to the broader socio-demographic transformation, in addition to reducing poverty. COVID-19, by disproportionately affecting small and medium enterprises, may jeopardize the potential of these beneficial effects. The downstream AFS has expanded rapidly in developing countries across the globe as part of the transformation of food markets. Even in Africa and Asia, consumers now purchase 80 percent of all food consumed, implying that food value chains provide 80 percent of all food consumed . As a result, food value chains in the developing world have become longer, stretching from rural to urban areas. Fragmented into many labor-intensive, informal, small and medium enterprises,AFS nodes often operate in clusters such as dense sets of food processing SMEs, scores of meal vendors at truck stops, and dense masses of wholesalers and retailers in public wholesale and wet markets . This concentration of activity is vulnerable to lock downs and other restrictions. Since the COVID-19 outbreak, food supply chain disruptions have been widely observed across the developing world. Many of the system’s smaller actors are under capitalized, informal, and ineligible for government support. They stand to suffer the most without adequate SME support, paving the way for accelerated consolidation and lower labor intensity in the mid and downstream AFS nodes. Fourth, fears of a mass exodus of African youth out of agriculture, disproportionate with normal patterns of youth transition out of agriculture as countries develop, appear to be overblown. Given Africa’s youth bulge, youth employment is especially high on the continent’s policy agenda. There is a perception that African youth may no longer be interested in agriculture . Exit from agriculture is a normal part of the structural transformation, and rural youth, in general, are less involved in agriculture than their older cohorts. It is mostly through youth that the structural transformation occurs: young people on average are more agile, educated, and adaptive to changing labor market conditions. Rural youth typically have less access to land than their parents did at the same age because many parents are not ready to transfer the farm and land rental markets are underdeveloped. A recent study of sectoral employment transitions in six African countries shows that both adults and youth are leaving agriculture, but not disproportionately relative to these countries’ level of development . In their 13-country study, after controlling for location and agricultural potential, Dolislager et al. find that youth do not spend fewer hours in on-farm work than older adults in general, and only younger adults spend less time in own farming . Youth appear to access off-farm AFS employment more easily than non-AFS jobs, especially wage work in urban and peri-urban zones. For rural youth, gaining access to opportunities both inside and outside the AFS is important, but promoting employment opportunities within the AFS is more likely to bring employment opportunities within reach of the rural poor. Fifth, sociodemographic changes, including decreasing fertility rates, rising rural schooling levels, and increasing participation of women in the rural workforce, further stimulate labor to move from farm to the non-farm AFS as well as to non-AFS jobs. Liu et al. , for example, find that, in Vietnam, the potential for agriculture to address youth unemployment is limited. However, as wages converge between rural and urban sectors, the rural economy is diversifying into non-farm activities, and access to education has become the key driver of improvements in rural household well-being. Gender differentiated preferences may affect the farm-nonfarm labor transition, as well. A field experiment in Ghana uncovered evidence that traditional gender roles lead to a division of labor that causes women to prefer investments in non-agricultural activities . This finding highlights the need to recognize women’s preference to diversify into non-farm activities in regions where gender roles preclude women from engaging in agricultural production.